daily market commentary

Nepse extends losses for third straight day

Published On: October 30, 2018 08:22 AM NPT

KATHMANDU, Oct 30: Stocks continued losing streak on Monday as the benchmark Nepal Stock Exchange (Nepse) index shed 10.56 points to close at 1,216.93 points.

Following the day's decline, Nepse closed in red for three consecutive sessions. Market activity also dropped to Rs 249 million on the back of the recent slump. The market has failed to find a substantial foothold amid lack of upbeat news on economic and financial front.

In terms of sectoral performance, hotels stocks led the broad decline on Monday with the group's sub-index shedding 2.57 percent. Non-life Insurance and Hydropower stocks also came under pressure as their respective sub-indices fell by over 1 percent each. Meanwhile, 'Others' and Banking sub-indices sank 0.98 percent and 0.85 percent, respectively. All other sub-indices edged lower on the day. 

Gurkhas Finance Ltd Promoter Share posted the highest turnover of over Rs 25 million. Banking scrips followed suit, as more than Rs 13 million worth of shares of NIC Asia Bank Ltd changed hands on the day. Similarly, Prabhu Bank Ltd and Janata Bank Ltd posted turnover of Rs 11 million and Rs. 10 million, respectively. Shares of NMB Bank Ltd, Bank of Kathmandu Ltd and Kumari Bank Ltd were also traded actively on the day.

Among advances, share price of Ridi Hydropower Development Company recovered by 7.84 percent after closing at an all time low of Rs 102 per share on Sunday. Similarly, Khani Khola Hydropower Company Ltd added 2.06 percent on its share price, recouping its previous session's losses. Share prices of Sana Kisan Bikas Bank Ltd and Nepal Seva Laghubitta Bittiya Sanstha Ltd also rose by almost 2 percent. Himalayan Power Partner Ltd, Womi Microfinance Bittiya Sanstha Ltd and ICFC Finance Ltd were among other gaining scrips of the day.

Rairang Hydropower Company Ltd turned in the worst performance of the day as it saw its share price plunge by 7.87 percent. Share price of Pokhara Finance Ltd also went down by 6.67 percent. Furthermore, NIBL Pragati Fund and United Modi Hydropower Ltd posted losses of over 5 percent each. Support Micro Finance Bittiya Sanstha Ltd and Nepal Hydro Developers Ltd also saw their share price go down by 4.98 percent and 4.8 percent, respectively. Besides, shares of Unnati Microfinance Bittiya Sanstha Ltd, Soaltee Hotel Ltd and Summit Micro Finance Development Bank Ltd also shed values.

On corporate front, Kalika Laghubitta Bittiya Sanstha Ltd published its financial report for the first quarter of FY2018/19 on Monday. The micro sector lender reported a 23.48 percent year-on-year decline in its net profit to Rs 1.24 million. In other news, Mission Development Bank Ltd has announced 11 percent bonus shares to its shareholders. The decision, however, is yet to be approved by the company's annual general meeting (AGM) and Nepal Rastra Bank (NRB).

ARKS technical analysis indicates bearish candlestick formation on the daily timeframe. With the recent downfall, technical indicators suggest bears gaining control of the market. Further, the index has dropped to the initial support range of near 1,215-point mark. Hence, the movement around the current level is crucial. The immediate support for the equity market lies at the psychological level of 1,200 points.

This column is produced by ARKS Capital Advisors Ltd www.arkscapitaladvisors.com

(Views expressed are those of the producer and do not necessarily reflect those of this publication)

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